The U.S. Supreme Court has vacated a lower court’s decision in the lawsuit challenging Verizon’s transfer of certain pension liabilities and remanded the case for further review.
The case includes two classes of pension plan participants: those whose benefit liabilities were transferred to Prudential and those whose liabilities remained in the plan. The 5th U.S. Circuit Court of Appeals affirmed dismissal of claims of the non-transferee class by a district court because the class did not prove individual harm and, therefore, lacked standing to sue.
However, the U.S. Supreme Court found this decision flawed, considering the trust law underpinnings of the Employee Retirement Income Security Act (ERISA). The high court remanded the case to the appellate court in light of its decision in Spokeo v. Robins (No. 13-1339) about whether “Congress may confer Article III standing upon a plaintiff who suffers no concrete harm other than the violation of a private right conferred by a federal statute.”
While it was not at issue in the petition for certiorari, regarding the appellate court’s dismissal of the transferee class claims, in a review of the petition, the Supreme Court agreed with the 5th Circuit that Verizon’s decision to transfer liabilities was a settlor function, that participant and beneficiary consent was not required first, and that loss of Pension Benefit Guaranty Corporation (PBGC) was not a benefit covered by ERISA’s interference of benefits provision.
The high court’s Verizon Petition for Certiorari Review is here.
It’s decision is on the second page of this order list.